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 Alcoa Corporation Reports Fourth Quarter 2016 Results
   Tuesday, January 24, 2017 4:10:01 PM ET

Alcoa Corporation (AA ):

4Q 2016 Results(1)

-- Net loss of $125 million, or $(0.68) per share, as a result of costs to streamline portfolio

-- Excluding special items, adjusted net income of $26 million, or $0.14 per share

-- Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), excluding special items of $335 million, up 18 percent sequentially on rising alumina pricing

-- Revenue of $2.5 billion, up 9 percent sequentially, reflecting higher volume in the Company’s rolled products business, and higher alumina pricing

-- $853 million cash balance and $1.4 billion of debt for net debt of $0.6 billion as of December 31, 2016

                                                                 
---------------------------------------------------- -------------------- -------------------- ------------------------------------------ -------------------- ------------------------------------------ -------------------- -------------------- ------------------------------------------ -------------------- ------------------------------------------
$M, except per share amounts                                              3Q16                      4Q16                        FY15                      FY16  
---------------------------------------------------- -------------------- -------------------- ------------------------------------------ -------------------- ------------------------------------------ -------------------- -------------------- ------------------------------------------ -------------------- ------------------------------------------
Revenue                                                           $      2,329                                 $      2,537                                   $     11,199                                 $      9,318
Net loss attributable to Alcoa Corporation                                                              $        (10 )                                                  $       (125 )                                                                       $       (863 )                                                  $       (400 )
Earnings per share attributable to Alcoa Corporation              $      (0.06 )                               $      (0.68 )                                 $      (4.73 )                               $      (2.19 )
---------------------------------------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Adjusted (loss) income                                                                                  $        (95 )                                                  $         26                                                                         $        103                                                    $       (227 )
Adjusted earnings per share                                       $      (0.52 )                               $       0.14                $       0.57              $      (1.24 )
---------------------------------------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Adjusted EBITDA excluding special items                           $        284              $        335                $      1,840              $      1,108  
---------------------------------------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- --------------------


______________________________________________________________________________

(1) Prior to November 1, 2016, Alcoa Corporation’s financial statements were prepared on a carve-out basis, as the underlying operations of the Company were previously consolidated as part of Alcoa Corporation’s former parent company’s financial statements. Accordingly, the financial results of Alcoa Corporation for full year 2015 and the first ten months of 2016 (including the third quarter 2016 and the first month of the fourth quarter 2016) were also prepared on a carve-out basis. The carve-out financial statements of Alcoa Corporation are not necessarily indicative of Alcoa Corporation’s combined results of operations, financial position, and cash flows had it been a standalone company during the referenced periods. See the Combined Financial Statements included in Exhibit 99.1 to Alcoa Corporation’s Form 10 registration statement and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2016 filed with the United States Securities and Exchange Commission on October 11, 2016 and December 1, 2016, respectively, for additional information.

______________________________________________________________________________

Alcoa Corporation (AA ), a global leader in bauxite, alumina, and aluminum products, today reported fourth quarter 2016 results that reflect profit growth at the combined segment level and an improved cash position, driven by higher alumina and aluminum pricing.

Since launching as an independent company on November 1, 2016, Alcoa has increased its cash position by $198 million and closed the fourth quarter 2016 with a cash balance of $853 million.

"Alcoa’s first reporting period as a new, standalone, publicly-traded company points to our ability to deliver shareholder value," said Roy Harvey, Chief Executive Officer of Alcoa. "Rising alumina and aluminum prices improved the bottom line, our alumina segment had exceptional profit growth in a stronger market environment and doubled margins, while our bauxite business also increased profits and reported robust margins. In addition, we continued to streamline our portfolio and generated cash to strengthen the balance sheet."

Mr. Harvey added: "We’ve entered 2017 focused on our strategic priorities. We will reduce complexity and costs across Alcoa, remain disciplined with cash, and focus on smart investments with strong returns."

In fourth quarter 2016, Alcoa reported a net loss of $125 million, or $(0.68) per share. Results include $151 million of special items primarily related to the permanent closure of Suralco’s refinery and mines in Suriname and the impairment of Alcoa of Australia Limited’s (AofA) interests in a Western Australia (WA) gas field. Fourth quarter 2016 results compare to a net loss of $10 million, or $(0.06) per share, in third quarter 2016.

Excluding the impact of special items, fourth quarter 2016 adjusted net income was $26 million, or $0.14 per share. In third quarter 2016, Alcoa reported an adjusted net loss of $95 million, or $(0.52) per share, excluding special items.

Alcoa reported fourth quarter 2016 adjusted EBITDA excluding special items of $335 million, up 18 percent from third quarter 2016. Higher alumina and metal prices drove the sequential change in adjusted EBITDA, more than offsetting increased costs primarily tied to energy.

In fourth quarter 2016, Alcoa reported revenue of $2.5 billion, up 9 percent sequentially, reflecting higher volumes in the Company’s rolled products business, as well as rising alumina and aluminum pricing.

In the fourth quarter, the Company achieved a seasonal low of 13 days working capital.

2016 Full-Year Results

In 2016, Alcoa reported a net loss of $400 million, or $(2.19) per share. Excluding special items, the Company reported an adjusted net loss of $227 million, or $(1.24) per share. The full year net loss was driven largely by costs associated with portfolio restructuring decisions, including the closure of the Warrick smelter and the Suralco refinery and mines, and the impairment of the WA gas field.

Adjusted EBITDA excluding special items for 2016 was $1.1 billion, compared to $1.8 billion in 2015, due to lower alumina and aluminum pricing during the first three quarters and incremental costs to operate the Warrick, IN rolling mill as a cold metal plant, partially offset by net productivity improvements. Revenue in 2016 was $9.3 billion, down 17 percent from 2015, reflecting lower pricing and volumes in alumina and aluminum, slightly offset by higher third-party bauxite shipments.

In 2016, Alcoa invested in return-seeking capital projects of $82 million, and controlled sustaining capital expenditures to $322 million. Return on capital in 2016 was 5.3 percent.

4Q 2016 Business Update

In the fourth quarter, Alcoa continued to successfully build its third-party bauxite business and to further streamline its portfolio.

-- AofA secured its first major bauxite export contract out of Western Australia (WA), and was granted approval to export up to 2.5 million metric tons per annum of bauxite for five years to third-party customers.

-- Alcoa announced the permanent closure of the Suralco alumina refinery and bauxite mines in Suriname, which have been fully curtailed since November 2015. Alcoa also impaired AofA’s interests in a WA gas field. Alcoa determined that the completed exploration activities do not support the current carrying value. AofA and Suralco are part of the Alcoa World Alumina and Chemicals group of companies owned 60 percent by Alcoa and 40 percent by Alumina Limited.

Early this month, Alcoa announced that it will restart capacity at the Portland Aluminium smelter in Australia that had been lost due to a December power outage. Portland Aluminium is an unincorporated joint venture between AofA (55 percent), CITIC Nominees Pty Ltd (22.5 percent), and Marubeni Aluminium Australia Pty Ltd (22.5 percent).

Market Update

For 2017, the Company projects relatively balanced global bauxite and alumina markets and a modest global aluminum surplus of 400 thousand to 800 thousand metric tons. Alcoa is projecting 2017 global aluminum demand growth of 4 percent over 2016.

Conference Call

Alcoa will hold its quarterly conference call at 5:00 PM Eastern Time (ET) on Tuesday, January 24, 2017 to present fourth quarter 2016 results and discuss the business and market outlook for 2017.

The call will be webcast via the Company’s homepage on www.alcoa.com. Presentation materials for the call will be available for viewing at approximately 4:15 PM ET on January 24, 2017 on the same website. Call information and related details are available under the "Investors" section at www.alcoa.com.

Dissemination of Company Information

Alcoa intends to make future announcements regarding Company developments and financial performance through its website at www.alcoa.com.

About Alcoa Corporation

Alcoa (AA ) is a global industry leader in bauxite, alumina, and aluminum products, with a strong portfolio of value-added cast and rolled products and substantial energy assets. Alcoa is built on a foundation of strong values and operating excellence dating back nearly 130 years to the world-changing discovery that made aluminum an affordable and vital part of modern life. Since inventing the aluminum industry, and throughout our history, our talented Alcoans have followed on with breakthrough innovations and best practices that have led to efficiency, safety, sustainability, and stronger communities wherever we operate. Visit us online on www.alcoa.com, follow @Alcoa on Twitter and on Facebook at www.facebook.com/Alcoa.

We have included the above website addresses only as inactive textual references and do not intend these to be active links to such websites. Information contained on such websites or that can be accessed through such websites does not constitute a part of this press release.

Forward-Looking Statements

This press release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning. All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts concerning global demand growth for bauxite, alumina and aluminum, and supply/demand balances; statements, projections or forecasts of future financial results or operating performance; and statements about strategies, outlook, business and financial prospects. These statements reflect beliefs and assumptions that are based on Alcoa Corporation’s perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa Corporation believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices and premiums, as applicable, for primary aluminum, alumina, and other products, and fluctuations in indexed-based and spot prices for alumina; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served by Alcoa Corporation; (d) the impact of changes in foreign currency exchange rates on costs and results; (e) increases in energy costs; (f) changes in discount rates or investment returns on pension assets; (g) the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated from restructuring programs and productivity improvement, cash sustainability, technology advancements, and other initiatives; (h) the inability to realize expected benefits, in each case as planned and by targeted completion dates, from acquisitions, divestitures, facility closures, curtailments, expansions, or joint ventures; (i) political, economic, and regulatory risks in the countries in which Alcoa Corporation operates or sells products; (j) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; (k) the impact of cyberattacks and potential information technology or data security breaches; and (l) the other risk factors discussed in Alcoa Corporation’s registration statement on Form 10 and other reports filed by Alcoa Corporation with the U.S. Securities and Exchange Commission. Alcoa Corporation disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Market projections are subject to the risks discussed above and other risks in the market.

Non-GAAP Financial Measures

Some of the information included in this release is derived from Alcoa’s consolidated financial information but is not presented in Alcoa’s financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the schedules to this release.

                                                                 
Alcoa Corporation and subsidiaries
Statement of Consolidated Operations (unaudited)
(dollars in millions, except per-share amounts)
                                                                                      
                                                                                                                                                                                     Quarter ended
                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          December 31,                                            September 30,                                           December 31,
                                                                                                             2015(2)                                                                  2016(2),(3)                                                                  2016(2)
                                                                                     ---------------------------------------------------                        ---------------------------------------------------                        ---------------------------------------------------
Sales                                                                                                   $       2,451                                                              $       2,329                                                              $       2,537
                                                                                                                                                                                                                                            
Cost of goods sold (exclusive of expenses below)                                                                2,157                                                                      1,968                                                                      2,123
Selling, general administrative, and other expenses                                                                92                                                                         92                                                                         92
Research and development expenses                                                                                  15                                                                          8                                                                          7
Provision for depreciation, depletion, and amortization                                                           186                                                                        181                                                                        182
Restructuring and other charges                                                                                   686                                                                         17                                                                        209
Interest expense                                                                                                   62                                                                         67                                                                         46
Other expenses (income), net                                                                    51                                 (106 )                                                     1  
                                                                                     -------------------- ----------- --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- --------------------
      Total costs and expenses                                                                                  3,249                                                                      2,227                                                                      2,660
                                                                                                                                                                                                                                            
(Loss) income before income taxes                                                                                (798 )                                                                      102                                                                       (123 )
Provision for income taxes                                                                      92                                   92                                    6  
                                                                                     -------------------- ----------- --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- --------------------
                                                                                                                                                                                                                                            
Net (loss) income                                                                                                (890 )                                                                       10                                                                       (129 )
                                                                                                                                                                                                                                            
Less: Net (loss) income attributable to noncontrolling interest                                (64 )                                                    20                                   (4 )
                                                                                     -------------------- ----------- --------------------                      -------------------- ----------- --------------------                      -------------------- ----------- --------------------
                                                                                                                                                                                                                                            
NET LOSS ATTRIBUTABLE TO ALCOA CORPORATION                                                              $        (826 )                                                            $         (10 )                                                            $        (125 )
                                                                                     ==================== =========== ====================                      ==================== =========== ====================                      ==================== =========== ====================
                                                                                                                                                                                                                                            
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON
SHAREHOLDERS(1):
   Basic:
     Net loss                                                                                           $       (4.52 )                                                            $       (0.06 )                                                            $       (0.68 )
     Average number of shares                                                                             182,471,195                                                                182,471,195                                                                182,688,806
                                                                                                                                                                                                                                            
   Diluted:
     Net loss                                                                                           $       (4.52 )                                                            $       (0.06 )                                                            $       (0.68 )
     Average number of shares                                                                             182,471,195                                                                182,471,195                                                                182,688,806
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                            
Shipments of aluminum products (metric tons)                                                                  819,000                                                                    761,000                                                                    852,000
                                                                                                                                                                                                                                                                             
(1)   The respective basic and diluted earnings per share for the quarters
                         ended December 31, 2015 and September 30, 2016 were calculated based
                         on the 182,471,195 shares of Alcoa Corporation common stock
                         distributed on November 1, 2016 in conjunction with the completion
                         of Alcoa Corporation’s separation from its former parent company and
                         are considered pro forma in nature. Prior to November 1, 2016, Alcoa
                         Corporation did not have any issued and outstanding common stock.
                          
(2)                      Prior to November 1, 2016, Alcoa Corporation’s financial statements
                         were prepared on a carve-out basis, as the underlying operations of
                         the Company were previously consolidated as part of Alcoa
                         Corporation’s former parent company’s financial statements.
                         Accordingly, the results of operations of Alcoa Corporation for the
                         quarters ended December 31, 2015 and September 30, 2016 and for the
                         month of October 2016 included in the quarter ended December 31,
                         2016 were prepared on such basis. The carve-out financial statements
                         of Alcoa Corporation are not necessarily indicative of Alcoa
                         Corporation’s combined results of operations had it been a
                         standalone company during the referenced periods. See the Combined
                         Financial Statements included in Exhibit 99.1 to Alcoa Corporation’s
                         Form 10 Registration Statement and the Company’s Quarterly Report on
                         Form 10-Q for the period ended September 30, 2016 filed with the
                         United States Securities and Exchange Commission on October 11, 2016
                         and December 1, 2016, respectively, for additional information.
                          
(3)                      In preparing the Statement of Consolidated Operations for the year
                         ended December 31, 2016, management discovered that the amount of
                         Cost of goods sold previously reported for the quarter ended
                         September 30, 2016 included an immaterial error due to an
                         under-allocation of LIFO expense of $4. As a result, management has
                         revised Cost of goods sold from the $1,964 previously reported to
                         $1,968 and Net loss attributable to Alcoa Corporation from the $(6)
                         previously reported to $(10).
                          
                                                             
Alcoa Corporation and subsidiaries
Statement of Consolidated Operations (unaudited), continued
(dollars in millions, except per-share amounts)
                                                                                  
                                                                                                                                              Year ended
                                                                                                                                             December 31,
                                                                                 ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          2015(2)                                                 2016(2),(3)
                                                                                 ------------------------------------------------------                        ---------------------------------------------------
Sales                                                                                               $         11,199                                                              $       9,318
                                                                                                                                                                
Cost of goods sold (exclusive of expenses below)                                                               9,039                                                                      7,898
Selling, general administrative, and other expenses                                                              353                                                                        359
Research and development expenses                                                                                 69                                                                         33
Provision for depreciation, depletion, and amortization                                                          780                                                                        718
Restructuring and other charges                                                                                  983                                                                        318
Interest expense                                                                                                 270                                                                        243
Other expenses (income), net                                                                   42                                  (89 )
                                                                                 -------------------- -------------- --------------------                      -------------------- ----------- --------------------
      Total costs and expenses                                                                                11,536                                                                      9,480
                                                                                                                                                                
Loss before income taxes                                                                                        (337 )                                                                     (162 )
Provision for income taxes                                                                    402                                  184  
                                                                                 -------------------- -------------- --------------------                      -------------------- ----------- --------------------
                                                                                                                                                                
Net loss                                                                                                        (739 )                                                                     (346 )
                                                                                                                                                                
Less: Net income attributable to noncontrolling interest                                      124                                   54  
                                                                                 -------------------- -------------- --------------------                      -------------------- ----------- --------------------
                                                                                                                                                                
NET LOSS ATTRIBUTABLE TO ALCOA CORPORATION                                                          $           (863 )                                                            $        (400 )
                                                                                 ==================== ============== ====================                      ==================== =========== ====================
                                                                                                                                                                
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON
SHAREHOLDERS(1):
   Basic:
     Net loss                                                                                       $          (4.73 )                                                            $       (2.19 )
     Average number of shares                                                                            182,471,195                                                                182,538,152
                                                                                                                                                                
   Diluted:
     Net loss                                                                                       $          (4.73 )                                                            $       (2.19 )
     Average number of shares                                                                            182,471,195                                                                182,538,152
                                                                                                                                                                
Common stock outstanding at the end of the period                                                     -                                                                182,930,995
                                                                                                                                                                
                                                                                                                                                                
Shipments of aluminum products (metric tons)                                                               3,227,000                                                                  3,147,000
                                                                                                                                                                                                 
(1)   The basic and diluted earnings per share for the year ended December
                         31, 2015 were calculated based on the 182,471,195 shares of Alcoa
                         Corporation common stock distributed on November 1, 2016 in
                         conjunction with the completion of Alcoa Corporation’s separation
                         from its former parent company and are considered pro forma in
                         nature. Prior to November 1, 2016, Alcoa Corporation did not have
                         any issued and outstanding common stock.
                          
(2)                      Prior to November 1, 2016, Alcoa Corporation’s financial statements
                         were prepared on a carve-out basis, as the underlying operations of
                         the Company were previously consolidated as part of Alcoa
                         Corporation’s former parent company’s financial statements.
                         Accordingly, the results of operations of Alcoa Corporation for the
                         year ended December 31, 2015 and for the first ten months included
                         in the year ended December 31, 2016 were prepared on such basis. The
                         carve-out financial statements of Alcoa Corporation are not
                         necessarily indicative of Alcoa Corporation’s combined results of
                         operations had it been a standalone company during the referenced
                         periods. See the Combined Financial Statements included in Exhibit
                         99.1 to Alcoa Corporation’s Form 10 Registration Statement and the
                         Company’s Quarterly Report on Form 10-Q for the period ended
                         September 30, 2016 filed with the United States Securities and
                         Exchange Commission on October 11, 2016 and December 1, 2016,
                         respectively, for additional information.
                          
(3)                      In preparing the Statement of Consolidated Operations for the year
                         ended December 31, 2016, management discovered that the amount of
                         Cost of goods sold previously reported for the nine months ended
                         September 30, 2016 included an immaterial error due to an
                         under-allocation of LIFO expense of $14. As a result, management has
                         revised Cost of goods sold from the $5,761 previously reported to
                         $5,775 and Net loss attributable to Alcoa Corporation from the
                         $(261) previously reported to $(275) for the nine months ended
                         September 30, 2016, the effects of which are included in the
                         Statement of Consolidated Operations for the year ended December 31,
                         2016.
                          
                                                                                                                               
Alcoa Corporation and subsidiaries
Consolidated Balance Sheet (unaudited)
(in millions)
                                                                                                                                                                       
                                                                                           December 31,                                                                  December 31,
                                                                                                                 2015(1)                                                                        2016
                                                                                        ------------------------------------------------------                        ------------------------------------------------------
ASSETS
Current assets:
  Cash and cash equivalents                                                                                $            557                                                              $            853
  Receivables from customers                                                                                            380                                                                           668
  Other receivables                                                                                                     124                                                                           166
  Inventories                                                                                                         1,172                                                                         1,160
  Prepaid expenses and other current assets                                                          333                                     334  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
    Total current assets                                                                           2,566                                   3,181  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                       
Properties, plants, and equipment                                                                                    22,118                                                                        22,550
Less: accumulated depreciation, depletion, and amortization                                       12,728                                  13,225  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
  Properties, plants, and equipment, net                                                           9,390                                   9,325  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Investments                                                                                                           1,472                                                                         1,358
Deferred income taxes                                                                                                   589                                                                           741
Fair value of derivative contracts                                                                                      997                                                                           468
Other noncurrent assets                                                                            1,399                                   1,661  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total assets                                                                                         $         16,413                                           $         16,734  
                                                                                        ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                       
LIABILITIES
Current liabilities:
  Accounts payable, trade                                                                                  $          1,379                                                              $          1,472
  Accrued compensation and retirement costs                                                                             313                                                                           456
  Taxes, including income taxes                                                                                         136                                                                           147
  Other current liabilities                                                                                             558                                                                           746
  Long-term debt due within one year                                                                  18                                      21  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
    Total current liabilities                                                                      2,404                                   2,842  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Long-term debt, less amount due within one year                                                                         207                                                                         1,424
Accrued pension benefits                                                                                                359                                                                         1,834
Accrued other postretirement benefits                                                                                    78                                                                         1,166
Asset retirement obligations                                                                                            539                                                                           604
Environmental remediation                                                                                               207                                                                           264
Noncurrent income taxes                                                                                                 508                                                                           307
Other noncurrent liabilities and deferred credits                                                    598                                     603  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
     Total liabilities                                                                             4,900                                   9,044  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                       
EQUITY
Alcoa Corporation shareholders’ equity:
  Parent Company net investment                                                                                      11,042                                                                -
  Common stock                                                                                               -                                                                             2
  Additional capital                                                                                         -                                                                         9,511
  Retained deficit                                                                                           -                                                                          (104 )
  Accumulated other comprehensive loss                                                            (1,600 )                                                   (3,761 )
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
    Total Alcoa Corporation shareholders’ equity                                                   9,442                                   5,648  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Noncontrolling interest                                                                            2,071                                   2,042  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
     Total equity                                                                                 11,513                                   7,690  
                                                                                        -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total liabilities and equity                                                                         $         16,413                                           $         16,734  
                                                                                        ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                           
(1)   Prior to November 1, 2016, Alcoa Corporation’s financial statements
                         were prepared on a carve-out basis, as the underlying operations of
                         the Company were previously consolidated as part of Alcoa
                         Corporation’s former parent company’s financial statements.
                         Accordingly, the financial position of Alcoa Corporation as of
                         December 31, 2015 was prepared on such basis. The carve-out
                         financial statements of Alcoa Corporation are not necessarily
                         indicative of Alcoa Corporation’s financial position had it been a
                         standalone company during the referenced periods. See the Combined
                         Financial Statements included in Exhibit 99.1 to Alcoa Corporation’s
                         Form 10 Registration Statement and the Company’s Quarterly Report on
                         Form 10-Q for the period ended September 30, 2016 filed with the
                         United States Securities and Exchange Commission on October 11, 2016
                         and December 1, 2016, respectively, for additional information.
                          
                                                                       
Alcoa Corporation and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
                                                                                            
                                                                                                                                                     Year ended
                                                                                                                                                    December 31,
                                                                                           ------------------------------------------------------------------------------------------------------------------------
                                                                                                                     2015                                                   2016
                                                                                           ---------------------------------------------------------                     -------------------------------------------------
CASH FROM OPERATIONS
Net loss                                                                                                      $           (739 )                                                            $   (346 )
Adjustments to reconcile net loss to cash from operations:
   Depreciation, depletion, and amortization                                                                               780                                                                   718
   Deferred income taxes                                                                                                    86                                                                   (45 )
   Equity income, net of dividends                                                                                         158                                                                    41
   Restructuring and other charges                                                                                         983                                                                   318
   Net gain from investing activities - asset sales                                                           (32 )                                                                (164 )
   Net periodic pension benefit cost                                                                                        67                                                                    68
   Stock-based compensation                                                                                                 35                                                                    28
   Other                                                                                                                    41                                                                   (22 )
   Changes in assets and liabilities, excluding effects of
   acquisitions, divestitures, and foreign currency translation
   adjustments:
     Decrease (increase) in receivables                                                                                    130                                                                  (223 )
     Decrease in inventories                                                                                               212                                                                    43
     Decrease (increase) in prepaid expenses and other current assets                                                       58                                                                   (43 )
     (Decrease) increase in accounts payable, trade                                                                       (156 )                                                                   6
     (Decrease) in accrued expenses                                                                                       (311 )                                                                (329 )
     (Decrease) in taxes, including income taxes                                                                           (32 )                                                                (148 )
     Pension contributions                                                                                                 (69 )                                                                 (66 )
     (Increase) in noncurrent assets(1)                                                                                   (356 )                                                                (208 )
     Increase in noncurrent liabilities                                                                  20                              61  
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
      CASH PROVIDED FROM (USED FOR) OPERATIONS                                                          875                            (311 )
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
                                                                                                                                                                          
FINANCING ACTIVITIES
Net transfers from (to) Parent Company                                                                                     (34 )                                                                 802
Cash provided at separation to Parent Company(2)                                                                -                                                                (1,072 )
Net change in short-term borrowings (original maturities of three                                               -                                                                    (4 )
months or less)
Payments on debt (original maturities greater than three months)                                                           (24 )                                                                 (34 )
Proceeds from exercise of employee stock options                                                                -                                                                    10
Contributions from noncontrolling interest                                                                                   2                                                                    48
Distributions to noncontrolling interest                                                               (106 )                                             (233 )
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
      CASH USED FOR FINANCING ACTIVITIES                                                               (162 )                                             (483 )
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
                                                                                                                                                                          
INVESTING ACTIVITIES
Capital expenditures                                                                                                      (391 )                                                                (404 )
Proceeds from the sale of assets and businesses(3)                                                                          70                                                                   112
Additions to investments                                                                                                   (63 )                                                                  (3 )
Sales of investments                                                                                            -                                                                   146
Net change in restricted cash(2)                                                             -                           1,226  
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
      CASH (USED FOR) PROVIDED FROM INVESTING ACTIVITIES                                               (384 )                                            1,077  
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
                                                                                                                                                                          
                                                                                                        (38 )                                               13  
      EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
Net change in cash and cash equivalents                                                                                    291                                                                   296
Cash and cash equivalents at beginning of year                                                          266                             557  
                                                                                           -------------------- -------------- --------------------                      -------------------- ------ --------------------
      CASH AND CASH EQUIVALENTS AT END OF YEAR                                                                $            557                                           $    853  
                                                                                           ==================== ============== ====================                      ==================== ====== ====================
                                                                                                                                                                                                      
(1)   The (Increase) in noncurrent assets line item for the year ended
                         December 31, 2015 and 2016 includes a $300 and $200, respectively,
                         prepayment related to a natural gas supply agreement for three
                         alumina refineries in Western Australia, which are owned by Alcoa
                         Corporation’s majority-owned subsidiary, Alcoa of Australia
                         Limited.
                          
(2)                      In September 2016, Alcoa Nederland Holding B.V., a wholly-owned
                         subsidiary of Alcoa Corporation, issued $1,250 in new senior notes
                         in preparation for the separation of the Company from its former
                         parent company (completed on November 1, 2016). The net proceeds of
                         $1,228 from the debt issuance, along with $81 of cash on hand from
                         the former parent company (see below), were required to be placed
                         into escrow contingent on the completion of the separation
                         transaction. As a result, the issuance of the debt and the increase
                         in restricted cash both in the amount of $1,228 were not reflected
                         in the Statement of Consolidated Cash Flows for the year ended
                         December 31, 2016 as these represent noncash financing and investing
                         activities, respectively. The $81 represented the necessary cash to
                         fund the redemption of the notes, pay all regularly scheduled
                         interest on the notes through a specified date defined in the notes,
                         and a premium on the principal of the notes if the separation had
                         not been completed by a certain time as defined in the notes. The
                         subsequent release of the $1,228 from escrow was reflected in the
                         Statement of Consolidated Cash Flows for the year ended December 31,
                         2016 as a cash inflow in the Net change in restricted cash line
                         item. The majority of this amount was paid to Alcoa Corporation’s
                         former parent company in conjunction with the completion of the
                         separation transaction.
                          
(3)                      Proceeds from the sale of assets and businesses for the year ended
                         December 31, 2016 includes a cash outflow for cash paid as a result
                         of post-closing adjustments associated with the December 2014
                         divestiture of an ownership stake in a smelter in the United States.
                          
                                                                                                                                                                                                                                                                                                                                                                                                                                  
Alcoa Corporation and subsidiaries
Segment Information (unaudited)
(dollars in millions, except realized prices; alumina and
aluminum production and shipments in thousands of metric tons
[kmt])
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                             4Q15                                                                 2015                                                                      1Q16                                                                      2Q16                                                                     3Q16                                                                      4Q16                                                                 2016
                                                                                                                       ---------------------------------------------                        ----------------------------------------------                        ------------------------------------------------------                        ---------------------------------------------                        ------------------------------------------------------                        ---------------------------------------------                        ----------------------------------------------
Bauxite:
 Bauxite production (million bone dry metric tons)                                                                                           11.7                                                                  45.3                                                                          11.3                                                                 10.8                                                                          11.1                                                                 11.8                                                                  45.0
 Third-party sales                                                                                                                        $    16                                                              $     71                                                              $             44                                                              $    87                                                              $             93                                                              $    91                                                              $    315
 Intersegment sales                                                                                                                       $   285                                                              $  1,160                                                              $            175                                                              $   182                                                              $            192                                                              $   202                                                              $    751
 Depreciation, depletion, and amortization                                                                                                $    21                                                              $     94                                                              $             17                                                              $    19                                                              $             21                                                              $    20                                                              $     77
 Income taxes                                                                                                                             $    32                                                              $    103                                                              $             16                                                              $    23                                                              $             22                                                              $    26                                                              $     87
 After-tax operating income (ATOI)                                                                                     $    77                        $    258                        $             44                        $    57                        $             55                        $    56                        $    212  
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Alumina:
 Alumina production (kmt)                                                                                                                   3,856                                                                15,720                                                                         3,330                                                                3,316                                                                         3,310                                                                3,295                                                                13,251
 Third-party alumina shipments (kmt)                                                                                                        2,713                                                                10,755                                                                         2,168                                                                2,266                                                                         2,361                                                                2,276                                                                 9,071
 Intersegment alumina shipments (kmt)                                                                                                       1,341                                                                 5,410                                                                         1,257                                                                1,137                                                                         1,140                                                                1,169                                                                 4,703
 Third-party sales                                                                                                                        $   707                                                              $  3,343                                                              $            496                                                              $   601                                                              $            585                                                              $   618                                                              $  2,300
 Intersegment sales                                                                                                                       $   357                                                              $  1,687                                                              $            292                                                              $   321                                                              $            317                                                              $   377                                                              $  1,307
 Equity loss                                                                                                                              $   (14 )                                                            $    (41 )                                                            $            (14 )                                                            $    (7 )                                                            $             (9 )                                                            $   (10 )                                                            $    (40 )
 Depreciation, depletion, and amortization                                                                                                $    47                                                              $    202                                                              $             45                                                              $    47                                                              $             47                                                              $    47                                                              $    186
 Income taxes                                                                                                                             $     4                                                              $    191                                                              $            (15 )                                                            $    15                                                              $              7                                                              $    30                                                              $     37
 ATOI                                                                                                                  $    19                        $    476                        $            (42 )                                         $    47                        $             16                        $    81                        $    102  
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Aluminum:
 Aluminum production (kmt)                                                                                                                    699                                                                 2,811                                                                           655                                                                  595                                                                           586                                                                  587                                                                 2,423
 Third-party sales                                                                                                                        $    10                                                              $     14                                                              $              9                                                              $     6                                                              $ -                                                              $    (6 )                                                            $      9
 Intersegment sales                                                                                                                       $ 1,052                                                              $  5,092                                                              $            987                                                              $   902                                                              $            918                                                              $   947                                                              $  3,754
 Equity income                                                                                                                            $     4                                                              $     25                                                              $              4                                                              $     3                                                              $              5                                                              $    11                                                              $     23
 Depreciation, depletion, and amortization                                                                                                $    77                                                              $    311                                                              $             76                                                              $    74                                                              $             72                                                              $    73                                                              $    295
 Income taxes                                                                                                                             $   (53 )                                                            $    (77 )                                                            $            (26 )                                                            $    (8 )                                                            $             (9 )                                                            $   (17 )                                                            $    (60 )
 ATOI                                                                                                                  $   (88 )                                         $      1                        $            (31 )                                         $     5                        $             10                        $    (3 )                                         $    (19 )
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Cast Products:
 Third-party aluminum shipments (kmt)                                                                                                         748                                                                 2,957                                                                           700                                                                  701                                                                           691                                                                  701                                                                 2,793
 Intersegment aluminum shipments (kmt)                                                                                                          3                                                                    12                                                                            11                                                                   45                                                                            51                                                                   65                                                                   172
 Alcoa Corporation’s average realized price per metric ton of aluminum                                         $ 1,802                                                              $  2,092                                                              $          1,815                                                              $ 1,854                                                              $          1,873                                                              $ 1,906                                                              $  1,862
 Third-party sales                                                                                                                        $ 1,348                                                              $  6,186                                                              $          1,270                                                              $ 1,300                                                              $          1,294                                                              $ 1,337                                                              $  5,201
 Intersegment sales                                                                                                                       $     8                                                              $     46                                                              $             25                                                              $    81                                                              $             91                                                              $   119                                                              $    316
 Equity loss                                                                                                                              $    (1 )                                                            $    (37 )                                                            $ -                                                              $    (3 )                                                            $             (2 )                                                            $    (2 )                                                            $     (7 )
 Depreciation, depletion, and amortization                                                                                                $    11                                                              $     42                                                              $             10                                                              $    11                                                              $             10                                                              $    11                                                              $     42
 Income taxes                                                                                                                             $    14                                                              $     49                                                              $             15                                                              $    16                                                              $             15                                                              $    14                                                              $     60
 ATOI                                                                                                                  $    39                        $    110                        $             45                        $    44                        $             44                        $    43                        $    176  
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Energy:
 Third-party sales (GWh)                                                                                                                    1,723                                                                 6,604                                                                         1,902                                                                1,648                                                                         1,886                                                                1,665                                                                 7,101
 Third-party sales                                                                                                                        $    92                                                              $    426                                                              $             65                                                              $    67                                                              $             77                                                              $    71                                                              $    280
 Intersegment sales                                                                                                                       $    69                                                              $    297                                                              $             55                                                              $    31                                                              $             41                                                              $    41                                                              $    168
 Depreciation, depletion, and amortization                                                                                                $    15                                                              $     61                                                              $             14                                                              $    14                                                              $             15                                                              $    14                                                              $     57
 Income taxes                                                                                                                             $    14                                                              $     69                                                              $              9                                                              $     4                                                              $              7                                                              $     6                                                              $     26
 ATOI                                                                                                                  $    34                        $    145                        $             24                        $    12                        $             23                        $    17                        $     76  
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Rolled Products:
 Third-party aluminum shipments (kmt)                                                                                                          67                                                                   266                                                                            64                                                                   69                                                                            70                                                                  151                                                                   354
 Third-party sales                                                                                                                        $   239                                                              $    993                                                              $            213                                                              $   233                                                              $            237                                                              $   386                                                              $  1,069
 Equity loss                                                                                                                              $    (8 )                                                            $    (32 )                                                            $            (11 )                                                            $   (10 )                                                            $            (10 )                                                            $    (9 )                                                            $    (40 )
 Depreciation, depletion, and amortization                                                                                                $     5                                                              $     23                                                              $              6                                                              $     6                                                              $              5                                                              $     6                                                              $     23
 Income taxes                                                                                                                             $     5                                                              $     26                                                              $              2                                                              $    (4 )                                                            $             (3 )                                                            $   (12 )                                                            $    (17 )
 ATOI                                                                                                                  $     2                        $     20                        $             (4 )                                         $   (12 )                                         $             (9 )                                         $   (16 )                                         $    (41 )
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Reconciliation of total segment ATOI to consolidated net loss                                                                                4Q15                                                                 2015                                                                      1Q16                                                                      2Q16                                                                     3Q16                                                                      4Q16                                                                 2016
attributable to Alcoa Corporation:
                                                                                                                       ---------------------------------------------                        ----------------------------------------------                        ------------------------------------------------------                        ---------------------------------------------                        ------------------------------------------------------                        ---------------------------------------------                        ----------------------------------------------
 Total segment ATOI                                                                                                                       $    83                                                              $  1,010                                                              $             36                                                              $   153                                                              $            139                                                              $   178                                                              $    506
 Unallocated amounts:
   Impact of LIFO                                                                                                                              39                                                                   107                                                                            18                                                                   (1 )                                                                           1                                                                  (28 )                                                                 (10 )
   Metal price lag                                                                                                                             (4 )                                                                 (30 )                                                                           2                                                                    2                                                                             1                                                                    4                                                                     9
   Interest expense                                                                                                                           (62 )                                                                (270 )                                                                         (64 )                                                                (66 )                                                                         (67 )                                                                (46 )                                                                (243 )
   Noncontrolling interest (net of tax)                                                                                                        64                                                                  (124 )                                                                           5                                                                  (43 )                                                                         (20 )                                                                  4                                                                   (54 )
   Corporate expense                                                                                                                          (42 )                                                                (180 )                                                                         (36 )                                                                (50 )                                                                         (50 )                                                                (46 )                                                                (182 )
   Restructuring and other charges                                                                                                           (686 )                                                                (983 )                                                                         (84 )                                                                 (8 )                                                                         (17 )                                                               (209 )                                                                (318 )
   Income taxes                                                                                                                               (76 )                                                                 (41 )                                                                         (17 )                                                                (22 )                                                                         (53 )                                                                 41                                                                   (51 )
   Other                                                                                               (142 )                          (352 )                                   (70 )                          (20 )                                    56         (23 )                           (57 )
------------------------------------------------------------------------------------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ------ --------------------
 Consolidated net loss attributable to Alcoa Corporation                                                               $  (826 )                                         $   (863 )                                         $           (210 )                                         $   (55 )                                         $            (10 )                                         $  (125 )                                         $   (400 )
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The difference between certain segment totals and consolidated
amounts is in Corporate.
 
(1)                    Prior to November 1, 2016, Alcoa Corporation’s financial statements
                                          were prepared on a carve-out basis, as the underlying operations of
                                          the Company were previously consolidated as part of Alcoa
                                          Corporation’s former parent company’s financial statements.
                                          Accordingly, the financial results of Alcoa Corporation for all
                                          periods prior to fourth quarter 2016 were prepared on such basis.
                                          Additionally, the financial results of Alcoa Corporation for the
                                          first month of fourth quarter 2016 and the first ten months of full
                                          year 2016 were also prepared on a carve-out basis. The carve-out
                                          financial statements of Alcoa Corporation are not necessarily
                                          indicative of Alcoa Corporation’s combined results of operations,
                                          financial position, and cash flows had it been a standalone company
                                          during the referenced periods. See the Combined Financial Statements
                                          included in Exhibit 99.1 to Alcoa Corporation’s Form 10 Registration
                                          Statement and the Company’s Quarterly Report on Form 10-Q for the
                                          period ended September 30, 2016 filed with the United States
                                          Securities and Exchange Commission on October 11, 2016 and December
                                          1, 2016, respectively, for additional information.
                                           
                                                                                                                                                                                                                                              
Alcoa Corporation and subsidiaries
Calculation of Financial Measures (unaudited)
(in millions, except per-share amounts)
                                                                                                                                                                                                                                                                                                         
Adjusted (Loss) Income(1)                                                                                                                                                  Quarter ended                                                                                                                                                        Year ended
                                                                                                    ----------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------
                                                                                                 December 31,                              September 30,                     December 31,                                                                      December 31,                                  December 31,
                                                                                                     2015                                                         2016                                                 2016                                                                              2015                                                             2016
                                                                               ---------------------------------------------                        -----------------------------                        -----------------------------                                             ---------------------------------------------                        --------------------------------------
                                                                                                                                                                                                                                                                                                                                                              
Net loss attributable to Alcoa Corporation                                                                             $  (826 )                                            $   (10 )                                            $  (125 )                                                                                 $  (863 )                                            $           (400 )
                                                                                                                                                                                                                                                                                                                                                              
Special items:
 Restructuring and other charges                                                                                           686                                                   17                                                  209                                                                                       983                                                           318
 Discrete tax items(2)                                                                                                      62                                                    6                                                  (11 )                                                                                     149                                                -
 Other special items(3)                                                                                                     75                                                  (97 )                                                 30                                                                                       103                                                           (65 )
 Tax impact(4)                                                                                                             (16 )                                                 (6 )                                                (22 )                                                                                     (96 )                                                         (25 )
 Noncontrolling interest impact(4)                                                                      (87 )                              (5 )                             (55 )                                                                 (173 )                                      (55 )
                                                                                                    -------------------- ----- --------------------      -------------------- ----- --------------------      -------------------- ----- --------------------                                           -------------------- ----- --------------------      -------------------- -------------- -
  Subtotal                                                                                                                 720                                                  (85 )                                                151                                                                                       966                                                           173
                                                                                                                                                                                                                                                                                                                                                              
Net (loss) income attributable to Alcoa Corporation - as adjusted                                         $  (106 )                                            $   (95 )                                            $    26                                                                $   103                           $           (227 )
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Diluted EPS(5):
 Net loss attributable to Alcoa Corporation common shareholders                                                        $ (4.52 )                                            $ (0.06 )                                            $ (0.68 )                                                                                 $ (4.73 )                                            $          (2.19 )
                                                                                                                                                                                                                                                                                                                                                              
 Net (loss) income attributable to Alcoa Corporation common                                                              (0.58 )                                              (0.52 )                                               0.14                                                                                      0.57                                                         (1.24 )
 shareholders - as adjusted
                                                                                                                                                                                                                                                                                                                                                              
Net (loss) income attributable to Alcoa Corporation - as adjusted is
a non-GAAP financial measure. Management believes that this measure
is meaningful to investors because management reviews the operating
results of Alcoa Corporation excluding the impacts of restructuring
and other charges, discrete tax items, and other special items
(collectively, "special items"). There can be no assurances that
additional special items will not occur in future periods. To
compensate for this limitation, management believes that it is
appropriate to consider both Net loss attributable to Alcoa
Corporation determined under GAAP as well as Net (loss) income
attributable to Alcoa Corporation - as adjusted.
                                         
(1)                                                                             Prior to November 1, 2016, Alcoa Corporation’s financial
                                                                                statements were prepared on a carve-out basis, as the underlying
                                                                                operations of the Company were previously consolidated as part of
                                                                                Alcoa Corporation’s former parent company’s financial statements.
                                                                                Accordingly, the results of operations of Alcoa Corporation for
                                                                                the quarters ended December 31, 2015 and September 30, 2016, for
                                                                                the month of October 2016 included in the quarter ended December
                                                                                31, 2016, for the year ended December 31, 2015, and for the first
                                                                                ten months included in the year ended December 31, 2016 were
                                                                                prepared on such basis. The carve-out financial statements of
                                                                                Alcoa Corporation are not necessarily indicative of Alcoa
                                                                                Corporation’s combined results of operations had it been a
                                                                                standalone company during the referenced periods. See the Combined
                                                                                Financial Statements included in Exhibit 99.1 to Alcoa
                                                                                Corporation’s Form 10 Registration Statement and the Company’s
                                                                                Quarterly Report on Form 10-Q for the period ended September 30,
                                                                                2016 filed with the United States Securities and Exchange
                                                                                Commission on October 11, 2016 and December 1, 2016, respectively,
                                                                                for additional information.
                                                                                 
(2)                                                                             Discrete tax items include the following:
                         ?                                         for the quarter ended December 31, 2015, a charge for a valuation
                                                                                allowance related to certain Iceland deferred tax assets ($56) and
                                                                                a net charge for a number of small items ($6);
                         ?                                         for the quarter ended September 30, 2016, a net charge for a
                                                                                number of small items;
                         ?                                         for the quarter ended December 31, 2016, a benefit for the
                                                                                remeasurement of certain deferred tax assets of a subsidiary in
                                                                                Brazil due to a tax rate change;
                         ?                                         for the year ended December 31, 2015, a charge for valuation
                                                                                allowances related to certain Suriname and Iceland deferred tax
                                                                                assets ($141) and a net charge for a number of small items ($8);
                                                                                and
                         ?                                         for the year ended December 31, 2016, a benefit for the
                                                                                remeasurement of certain deferred tax assets of a subsidiary in
                                                                                Brazil due to a tax rate change ($11) and a net charge for a
                                                                                number of other items ($11).
                                                                                 
(3)                                                                             Other special items include the following:
                         ?                                         for the quarter ended December 31, 2015, a write-down of inventory
                                                                                related to the curtailment or permanent closure of various
                                                                                facilities in Suriname and the United States ($59), a net
                                                                                unfavorable change in certain mark-to-market energy derivative
                                                                                contracts ($10), and costs associated with the then-planned
                                                                                separation of Alcoa Corporation from its former parent company
                                                                                ($6);
                         ?                                         for the quarter ended September 30, 2016, a gain on the sale of
                                                                                wharf property near the Intalco, Washington smelter ($118), costs
                                                                                associated with the then-planned separation of Alcoa Corporation
                                                                                from its former parent company ($23), and a net favorable change
                                                                                in certain mark-to-market energy derivative contracts ($2);
                         ?                                         for the quarter ended December 31, 2016, costs associated with the
                                                                                separation of Alcoa Corporation from its former parent company
                                                                                ($19), interest expense incurred in October 2016 related to debt
                                                                                that was issued in September 2016 in preparation for the
                                                                                separation of Alcoa Corporation from its former parent company
                                                                                (completed on November 1, 2016) ($8), a net unfavorable change in
                                                                                certain mark-to-market energy derivative contracts ($2), and an
                                                                                inventory adjustment at a curtailed refinery in the United States
                                                                                ($1);
                         ?                                         for the year ended December 31, 2015, a write-down of inventory
                                                                                related to the curtailment or permanent closure of various
                                                                                facilities in Suriname, the United States, Brazil, and Australia
                                                                                ($90), a net unfavorable change in certain mark-to-market energy
                                                                                derivative contracts ($30), a gain on the sale of land in the
                                                                                United States ($29), and costs associated with the then-planned
                                                                                separation of Alcoa Corporation from its former parent company
                                                                                ($12); and
                         ?                                         for the year ended December 31, 2016, a gain on the sale of wharf
                                                                                property near the Intalco, Washington smelter ($118), costs
                                                                                associated with the separation of Alcoa Corporation from its
                                                                                former parent company ($73), a gain on the sale of an equity
                                                                                investment in a natural gas pipeline in Australia ($27), a benefit
                                                                                for an arbitration recovery related to a 2010 fire at the Iceland
                                                                                smelter ($14), interest expense incurred in October 2016 related
                                                                                to debt that was issued in September 2016 in preparation for the
                                                                                separation of Alcoa Corporation from its former parent company
                                                                                (completed on November 1, 2016) ($8), a write-down of inventory
                                                                                related to the permanent closure of a smelter in the United States
                                                                                and adjustments two previously curtailed facilities ($7), and a
                                                                                net unfavorable change in certain mark-to-market energy derivative
                                                                                contracts ($6).
                                                                                 
(4)                                                                             The tax impact on special items is based on the applicable
                                                                                statutory rates in the jurisdictions where the special items
                                                                                occurred. The noncontrolling interest impact on special items
                                                                                represents Alcoa’s partners’ share of certain special items.
                                                                                 
(5)                                                                             In any given period, the average number of shares applicable to
                                                                                diluted EPS for Net loss attributable to Alcoa Corporation common
                                                                                shareholders may exclude certain share equivalents as their effect
                                                                                is anti-dilutive. However, certain of these share equivalents may
                                                                                become dilutive in the EPS calculation applicable to Net (loss)
                                                                                income attributable to Alcoa Corporation common shareholders - as
                                                                                adjusted due to a larger and/or positive numerator.
                                                                                 
                                                                                Specifically, for the quarter ended December 31, 2016, share
                                                                                equivalents associated with outstanding employee stock options and
                                                                                awards were dilutive based on Net income attributable to Alcoa
                                                                                Corporation common shareholders - as adjusted, resulting in a
                                                                                diluted average number of shares of 184,448,353 and for the year
                                                                                ended December 31, 2016, no additional share equivalents were
                                                                                dilutive based on Net loss attributable to Alcoa Corporation
                                                                                common shareholders - as adjusted, resulting in a diluted average
                                                                                number of shares of 182,538,152.
                                                                                 
                                                                                Prior to November 1, 2016, Alcoa Corporation did not have any
                                                                                issued and outstanding common stock. As such, the respective basic
                                                                                and diluted EPS related to both Net loss attributable to Alcoa
                                                                                Corporation and Net (loss) income attributable to Alcoa
                                                                                Corporation - as adjusted for the quarters ended December 31, 2015
                                                                                and September 30, 2016 and for the year ended December 31, 2015
                                                                                were calculated based on the 182,471,195 shares of Alcoa
                                                                                Corporation common stock distributed on November 1, 2016 in
                                                                                conjunction with the completion of Alcoa Corporation’s separation
                                                                                from its former parent company and are considered pro forma in
                                                                                nature.
 
                                                                                                                                                                                                                        
Alcoa Corporation and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in millions)
                                                                                                                                                                                                                                                                                   
Adjusted EBITDA(1)                                                                                                                                    Quarter ended                                                                                                                                                             Year ended
                                                                                 -------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------
                                                                             December 31,                             September 30,                    December 31,                                                                      December 31,                              December 31,
                                                                                 2015                                                        2016                                                2016                                                                              2015                                                         2016
                                                            --------------------------------------------                        ----------------------------                        ----------------------------                                             ---------------------------------------------                        ------------------------------
                                                                                                                                                                                                                                                                                                                                        
Net loss attributable to Alcoa Corporation                                                          $ (826 )                                            $  (10 )                                            $ (125 )                                                                                 $  (863 )                                            $   (400 )
                                                                                                                                                                                                                                                                                                                                        
Add:
 Net (loss) income attributable to noncontrolling interests                                            (64 )                                                20                                                  (4 )                                                                                     124                                                    54
                                                                                                        92                                                  92                                                   6                                                                                       402                                                   184
 Provision for income taxes
 Other expenses (income), net                                                                           51                                                (106 )                                                 1                                                                                        42                                                   (89 )
 Interest expense                                                                                       62                                                  67                                                  46                                                                                       270                                                   243
 Restructuring and other charges                                                                       686                                                  17                                                 209                                                                                       983                                                   318
 Provision for depreciation, depletion, and amortization                            186           181           182                                                 780             718  
                                                                                 -------------------- ---- --------------------      -------------------- ---- --------------------      -------------------- ---- --------------------                                           -------------------- ----- --------------------      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                        
Adjusted EBITDA                                                                                     $  187                           $  261                           $  315                                                                $ 1,738                           $  1,028  
                                                                                 ==================== ==== ====================      ==================== ==== ====================      ==================== ==== ====================                                           ==================== ===== ====================      ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                        
Special items(2)                                                                     65            23            20                                                 102              80  
                                                                                 -------------------- ---- --------------------      -------------------- ---- --------------------      -------------------- ---- --------------------                                           -------------------- ----- --------------------      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                        
Adjusted EBITDA, excluding special items                                                            $  252                           $  284                           $  335                                                                $ 1,840                           $  1,108  
                                                                                 ==================== ==== ====================      ==================== ==== ====================      ==================== ==== ====================                                           ==================== ===== ====================      ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                        
Alcoa Corporation’s definition of Adjusted EBITDA (Earnings before
interest, taxes, depreciation, and amortization) is net margin plus
an add-back for depreciation, depletion, and amortization. Net
margin is equivalent to Sales minus the following items: Cost of
goods sold; Selling, general administrative, and other expenses;
Research and development expenses; and Provision for depreciation,
depletion, and amortization. Adjusted EBITDA is a non-GAAP financial
measure. Management believes that this measure is meaningful to
investors because Adjusted EBITDA provides additional information
with respect to Alcoa Corporation’s operating performance and the
Company’s ability to meet its financial obligations. The Adjusted
EBITDA presented may not be comparable to similarly titled measures
of other companies.
                                 
(1)                                                             Prior to November 1, 2016, Alcoa Corporation’s financial
                                                                statements were prepared on a carve-out basis, as the underlying
                                                                operations of the Company were previously consolidated as part of
                                                                Alcoa Corporation’s former parent company’s financial statements.
                                                                Accordingly, the results of operations of Alcoa Corporation for
                                                                the quarters ended December 31, 2015 and September 30, 2016, for
                                                                the month of October 2016 included in the quarter ended December
                                                                31, 2016, for the year ended December 31, 2015, and for the first
                                                                ten months included in the year ended December 31, 2016 were
                                                                prepared on such basis. The carve-out financial statements of
                                                                Alcoa Corporation are not necessarily indicative of Alcoa
                                                                Corporation’s combined results of operations had it been a
                                                                standalone company during the referenced periods. See the Combined
                                                                Financial Statements included in Exhibit 99.1 to Alcoa
                                                                Corporation’s Form 10 Registration Statement and the Company’s
                                                                Quarterly Report on Form 10-Q for the period ended September 30,
                                                                2016 filed with the United States Securities and Exchange
                                                                Commission on October 11, 2016 and December 1, 2016, respectively,
                                                                for additional information.
                                                                 
(2)                                                             Special items include the following (see reconciliation of
                                                                Adjusted (Loss) Income above for additional information):
                 ?                                 for the quarter ended December 31, 2015, a write-down of inventory
                                                                related to the curtailment or permanent closure of various
                                                                facilities in Suriname and the United States ($59) and costs
                                                                associated with the then-planned separation of Alcoa Corporation
                                                                from its former parent company ($6);
                 ?                                 for the quarter ended September 30, 2016, costs associated with
                                                                the then-planned separation of Alcoa Corporation from its former
                                                                parent company;
                 ?                                 for the quarter ended December 31, 2016, costs associated with the
                                                                separation of Alcoa Corporation from its former parent company
                                                                ($19) and an inventory adjustment at a curtailed refinery in the
                                                                United States ($1);
                 ?                                 for the year ended December 31, 2015, a write-down of inventory
                                                                related to the curtailment or permanent closure of various
                                                                facilities in Suriname, the United States, Brazil, and Australia
                                                                ($90) and costs associated with the then-planned separation of
                                                                Alcoa Corporation from its former parent company ($12); and
                 ?                                 for the year ended December 31, 2016, costs associated with the
                                                                separation of Alcoa Corporation from its former parent company
                                                                ($73) and a write-down of inventory related to the permanent
                                                                closure of a smelter in the United States and adjustments at two
                                                                previously curtailed facilities ($7).
                                                                                       
Alcoa Corporation and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in millions)
                                                                                                                               
Net Debt                                                                         September 30,                                          December 31,
                                                                                    2016(1)                                                 2016
                                                                     ----------------------------------                       ------------------------------
                                                                                                                               
Short-term borrowings                                                                   $ -                                         $          1
Long-term debt due within one year                                                                    21                                                   21
Long-term debt, less amount due within one year                                 1,457                             1,424
                                                                     -------------------- --------------                      -------------------- ----------
Total debt                                                                              $          1,478                                         $      1,446
                                                                                                                               
Less: Cash and cash equivalents                                                   241                               853
                                                                     -------------------- --------------                      -------------------- ----------
                                                                                                                               
Net debt                                                                                $          1,237                                         $        593
                                                                     ==================== ==============                      ==================== ==========
Net debt is a non-GAAP financial measure. Management believes that
this measure is meaningful to investors because management
assesses Alcoa Corporation’s leverage position after factoring in
available cash that could be used to repay outstanding debt.
 
(1)                                             Prior to November 1, 2016, Alcoa Corporation’s financial statements
                                                were prepared on a carve-out basis, as the underlying operations of
                                                the Company were previously consolidated as part of Alcoa
                                                Corporation’s former parent company’s financial statements.
                                                Accordingly, the financial position of Alcoa Corporation as of
                                                September 30, 2016 was prepared on such basis. The carve-out
                                                financial statements of Alcoa Corporation are not necessarily
                                                indicative of Alcoa Corporation’s financial position had it been a
                                                standalone company during the referenced periods. See the Combined
                                                Financial Statements included in Exhibit 99.1 to Alcoa Corporation’s
                                                Form 10 Registration Statement and the Company’s Quarterly Report on
                                                Form 10-Q for the period ended September 30, 2016 filed with the
                                                United States Securities and Exchange Commission on October 11, 2016
                                                and December 1, 2016, respectively, for additional information.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170124006343r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170124006343/en/

SOURCE: Alcoa Corporation

Alcoa Corporation 
Investor Contact: 
James Dwyer +1 212-518-5450 
James.Dwyer@alcoa.com 
or 
Media Contact: 
Monica Orbe +1 212-518-5455 
Monica.Orbe@alcoa.com


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